What Is College Tuition Insurance?

By Kristi Waterworth – Updated Sep 11, 2025 at 2:50 AM EST

Key Points

College tuition insurance reimburses fees if a student exits due to covered incidences.
This policy covers illnesses, injuries, and mental health conditions.
The insurance doesn't apply for voluntary dropout or substance abuse issues.

Sending kids off to college these days can be incredibly expensive, especially if your child has been accepted by a top school but has little in the way of scholarships or other aid. If something happens and they can't finish the semester, can you afford to be out all that money?

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A tuition reimbursement plan is a prorated refund where students only lose the part of the tuition they used while at school (i.e., if they stayed for the first quarter of a semester, they might receive a 75% refund).

Lastly, to make a claim, your student will need to see a doctor for their condition. They will also need to provide a note or other medical record that officially states that the student will need to discontinue their education for some significant amount of time.

For example, suppose your child is diagnosed with a major illness in the sixth week of school. They'd need a doctor's note saying they will experience a significant enough interruption of their education that dropping out is the only short-term solution. (This isn't meant for short-term situations, such as when your kid has appendicitis and will need a week off from school.)

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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